Planned new presidential palace in Nusantara: paying through crowdfunding? The Indonesian government has not ruled out using crowdfunding to raise funds for the development of the planned new capital Nusantara in East Kalimantan on Borneo island. According to the Tempo.co news portal, Bambang Susantono, a member of the new capital’s authority, IKN, said this would “allow the community to participate in the project”. “It is possible to get funding through crowdfunding. We are exploring any creative funding model,” Bambang said on March 21. The announcement immediately drew ridicule and questioning from critics…
The Indonesian government has not ruled out using crowdfunding to raise funds for the development of the planned new capital Nusantara in East Kalimantan on Borneo island.
Bambang Susantono, a member of the new capital’s authority, IKN, said this would “allow the community to participate in the project”. Tempo News Portal.
“Funding can be done through crowdfunding. We are exploring any creative funding model,” Bambang said on March 21.
The announcement drew immediate jeers from critics and questioned what crowdfunding meant for ownership of planned cities.
This led IKN spokesman Sidik Pramono to clarify on March 25 that the crowdfunding scheme to build the new capital was only “one of many funding options outside the country’s national budget”.
He detailed that the crowdfunding will provide “an opportunity for the public to financially actively participate in the construction of public and social facilities in Nusantara”. Getting people involved in the project will help “build trust and confidence among potential investors”.
State funding first step
As a first step, he noted, new capital development may use funds from the state budget as a “lever to encourage market confidence.”
Unorthodox proposal for new capital crowdfunding scheme comes after Japan’s SoftBank Group comes to light will not invest in this projectMore than two years ago, Indonesian Investment Minister Luhut Pandjaitan announced that the company had committed $40 billion for the project.
Reciprocity of Nusantara crowdfunding project unclear
Critics say the idea of crowdfunding for the new capital is tantamount to asking the public to co-pay at a time when they are already burdened with high taxes, high education costs, rising energy and food costs and inflation. They also pointed out that the state budget for the project already consists of taxes paid by the public.
Additionally, crowdfunding is often used by individuals and small startups to finance commercial ventures and involves soliciting small donations from large numbers of people, often involving some sort of “reward” or compensation in the form of equity in a company or project. The potential reciprocity of donors remains unclear as far as the crowdfunding proposal for the new capital is concerned.
